CapRock Nabs High-Image Industrial Buy

TUSTIN, CA—CapRock Partners LLC has acquired a high-image mixed-use industrial property at 14191 Myford Rd.here from a seller GlobeSt.com has learned is a joint venture between Penwood Real Estate Investments and Western Realco for a price not revealed to us. Located within the Jamboree/I-5 freeway and 261 toll-road corridor, the property comprises 7.4 acres with a 110,000-square-foot industrial/R&D building that includes 10,000 square feet of second-floor office space.

CapRock was unable to reveal the identity of the tenant in place at the property, but did tell GlobeSt.com that it was a NASDAQ publicly traded company. The tenant will occupy almost 40% of the building, and CapRock will convert the remaining 69,000 square feet to creative-office use with a 4:1 parking ratio—a rare offering in this sought-after location.

The new owner plans to invest well over $1 million in the conversion to a modern, open-office layout, as well as to fund additional improvements, including collaborative outdoor work areas and outdoor entertainment amenities—all features that are aimed to further set the property apart in this supply-constrained market. The project recently received an extensive array of improvements, including a new façade with an expansive glass curtain wall, resurfaced entry parking lot, landscaping and a seismic retrofit.

The asset is located minutes from retail centers Tustin Legacy and Tustin Marketplace and within walking distance from a state-of-the-art L.A. Fitness facility. The building is fully air-conditioned and is surrounded by other institutional-owned and –managed properties.

According to Pat Daniels, CapRock's co-founder and COO, “This transaction is a quintessential CapRock Partners investment purchase. Beyond offering impressive fundamentals—superior location, high-quality construction and a tenant-in-tow—the property is ideally positioned for us to add value and realize a significant upside.”

CapRock will begin improvements on the property this fall and anticipates bringing the asset to market late this year. Scott Read of Newmark Grubb Knight Frank brokered the deal and will lead CapRock's marketing efforts.

“As Orange County grows into its moniker as the 'Tech Coast,' we are seeing a heightened demand for creative-office space, and there is a shortage of that product for larger users in the airport area,” says Jon Pharris, a CapRock principal and director of acquisitions. “With our planned renovations and our experience in repositioning similar buildings in Silicon Valley, we expect this redesigned building to command a premium and fill a void in this submarket.”

The firm has been actively purchasing buildings and land in Southern California for industrial use. As GlobeSt.com reported last week, CapRockpurchased a 407,455-square-foot industrialproject at the intersection of Iowa and Palmyrita aves. in Riverside, CA, from a seller identified to GlobeSt.com as PSIP Magellan Riverside I LLC, a Delaware Corp., for a price undisclosed to us. The project contains two 100%-leased industrial buildings and 1.49 acres of unimproved land that CapRock plans to entitle for the development of a future industrial building.